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Marsh & McLennan Cos. has announced it will cut about 3,000 jobs, roughly five percent of its worldwide staff. The job cuts are in response to expected declines in revenue, according to Marsh. After New York Attorney General Eliot Spitzer filed an October civil complaint alleging bid rigging, the company said it set aside $232 million for any settlement agreement. This follows the $40 million settlement agreement Marsh reached with the SEC regarding its Putnam mutual fund unit.
In response to the bid rigging allegations, CEO Jeffrey Greenberg resigned and Marsh removed two senior Marsh Inc. executives linked to practices Spitzer is probing. Marsh''s general counsel has also stepped down.
Marsh & McLennan is the world''s number one insurance broker based in New York. Shares of Marsh & McLennan have lost more than 40 percent since Spitzer''s lawsuit was announced. The company''s net income has fallen to $21 million, or four cents per share, from $357 million, or 65 cents, from a year earlier. The decline is a 94 percent slide. The job cuts will result in restructuring charges of approximately $325 million during the next six months.
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